Renowned hedge fund manager David Tepper, CEO of Appaloosa Management, has made a bold move in the second quarter, shedding shares of industry giant Nvidia and investing heavily in undervalued Chinese stocks. With a net worth of $21.3 billion, Tepper is known for his contrarian approach to investing, often going against the grain.
Appaloosa Management sold 3.73 million shares of Nvidia, worth approximately $450 million, in Q2, leaving the fund with only 690,000 shares. This move follows a similar pattern in the first quarter, where Tepper sold 3.48 million shares of Nvidia despite the stock’s surge. The fund also divested from other chip stocks, including Intel and Advanced Micro Devices, and trimmed its position in “AI stocks” like Amazon, Oracle, Microsoft, and Meta Platforms.
However, Tepper’s buying spree in China has raised eyebrows. Despite the country’s struggling tech sector, Appaloosa added over 1 million shares of the Kraneshares CSI China Internet ETF, which includes Tencent and Alibaba as its top holdings. The fund also invested in JD.com, iShares China Large-Cap ETF, and KE Holdings, a Chinese real estate services company. Alibaba remains Tepper’s top holding, making up 12.2% of the Appaloosa portfolio.
Tepper’s bullishness on China may be attributed to the sector’s oversold state and potential for recovery. The recent surprise interest rate cuts by the Chinese government could be a sign of efforts to stimulate the economy, which could benefit the sector. However, investors should exercise caution, as China’s economy remains weak, and new chip export restrictions from the U.S. and others could hinder its recovery.
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